Why does the system seem to favor mega-retailers (who already can afford the technology to track destination sales taxes) at the expense of small retailers who can afford to do that?
Certainly, implementation of destination sourcing may be less of an issue for a retailer that already has a system sophisticated enough to handle many different local sales tax rates and taxing jurisdictions, as opposed to only one. However, the intent of the States involved in the Streamlined Sales Tax Project and in the drafting of the provisions in the Agreement was not to favor large retailers. For uniformity’s sake, a choice had to be made for all States joining the Agreement to source sales one way or another, either by origin or by destination. Most states involved in the Streamlined Sales Tax Project were already destination sourcing states. In addition, from a policy standpoint, if all states imposing sales tax uniformly use destination sourcing, this would eliminate the artificial incentive for retail businesses to locate in any one particular state because of that state’s sales tax laws (or lack of them).
Related Questions
- Why does the system seem to favor mega-retailers (who already can afford the technology to track destination sales taxes) at the expense of small retailers who can afford to do that?
- How do the harmonized sales taxes in Ontario and British Columbia, specifically, affect innovation and technology?
- Does the city plan to make changes to the bus system if the sales taxes are approved?
